Jet Airways’ Chairman Naresh Goyal
stepped down on March 1, ending 25 years with a whimper; aviation
pundits in India were not surprised.
Fliers will agree that not too long ago, Jet had set the gold standard
for service and excellence.
But over the last few years, its quarterly losses had grown, as had its
In just ten years, the company with close to 50 percent market share went
down to less than 15.
In early March, for example, 47 of Jet’s
planes were on the ground. In addition to that, 9 ATRs and 36 B737 series
aircraft, which included all its B737 MAX8 planes, were grounded at various
locations across the country.
Jet also just stopped flying to a number
of destinations within the country.
Verdict On Goyal
Part of the reason for the airline running
to the ground was Goyal’s manner.
He is famous for his temper tantrums and
well known for taking pot shots at his senior staff anytime, anywhere.
Witness the number of top management officials
who quit the carrier.
His wife Anita Goyal, who is also on the
board was in charge of the commercial department and ran it like her own
It was often said that nothing moved in
the department without a nod from the ‘Madam’.
King of Networking
But these quirks were more than made up
by Naresh Goyal’s fantastic ability to network with the high and
mighty in the world of aviation, as well as in the corridors of power
Naresh was so good at his networking that
he made sure Jet had no major competitor apart from Air India.
Air India, in fact, was told to fall in
line through directives from the civil aviation ministry that was influenced
It is well known that Goyal’s lobbying
with Ministers and politicians put the screws to moves by the Tata-Singapore
Airline JV in the mid-Nineties (he apparently convinced them that the
JV was anti-national).
For their part, the Tatas did not take it
too kindly and when Goyal went with a begging bowl asking for help sometime
ago, the Tatas simply said, ‘No, thank you.’
Now, no one listens to Goyal in the corridors
So, his appeal to the government for help,
and mind you this is election time, has gone unheard.
The government would not like a failed Jet
Airways; it would send the wrong signals to the people on the eve of a
countrywide election. The politicians here have made it clear to the primary
lenders, the banks, to save Jet Airways but not Naresh Goyal.
So, where does that leave Jet Airways?
Lenders led by the State Bank of India own
50 percent equity in the airline through 114 million new shares that were
issued under the new regulations of the Reserve Bank of India (RBI) for
companies which have negative net worth.
Now, there is a view that the airline will
survive to see another day, perhaps in another form but in the same name.
Looking For New Partners?
If the market and aviation watchers are
to be believed, the main bank, State Bank of India’s scenario for
Jet will be coaxing Etihad, a minority shareholder in Jet Airways (it
has 24 percent stake in the airline and 50.1 per cent in its frequent
flier program, JetPrivilege), to provide new leadership.
Once the airline stabilizes, the search
will start for a buyer.
Another option is to let Jet go bankrupt.
If that happens, the Tatas could buy Jet
Airways. Naresh Goyal, who still holds a sizable percentage of Jet Airways
stock, obviously would not favor that move or like it at all.
Infusion of finances along with a leaner
cost structure could save the airline.
All this upheaval is playing out as Jet
Airways marks its 25th year, celebrating with a “Looking back, Soaring
ahead” attempt at branding.
No doubt 2019 will be a year Naresh Goyal
will look back at for a long, long time.